LinkedIn heads into China, says VP Rajan

Social network believes it can attract 100 million professionals

By Michael Kan

May 26, 2011

IDG News Service

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LinkedIn is exploring opportunities in China, a market with 100 million working professionals that the business networking site believes it can attract, according to the company's vice president Arvind Rajan.

The US company is in the early stages of developing a strategy for China, and has yet to consider any possible partnerships. "We are quite intrigued by the opportunities in China," Rajan told the CHINICT tech conference. "At the same time, we want to be quite cautious with how we approach the market."

LinkedIn's business networking site allows professionals to connect one another. More than 1 million of LinkedIn's 100 million users come from China, Rajan said, even though the site is not available in the Chinese language.

"We hear from our members globally every day, 'When are we going to be bigger in China?' They want to do more business in China. They want to hire people in China," Rajan said. "We also hear from Chinese companies that they want to hire people on a global basis."

Rajan said he will be talking with Chinese companies while visiting the country, to learn more about the market and what role LinkedIn can play. "In China, everything is big," he said, speaking on the sidelines of the CHINICT conference. "The market is big, but the challenges are also big."

Some of those challenges include the intense competition from other Chinese firms, as well as the high expectations of Chinese Internet users. Rajan also pointed to the "political filtering" on the country's Internet. China's government routinely censors content on the web deemed politically sensitive, blocking foreign sites such as Facebook, YouTube and Twitter.

In February, China's Internet censors also temporarily blocked LinkedIn. The move was tied to Chinese government efforts to suppress mention of an anonymous online protest call made on the site, according to analysts.

The Chinese market for professional social networking sites is still small, according to Mark Natkin, managing director Marbridge Consulting. The major challenge is getting Chinese users comfortable with networking online, since many prefer to do it in face-to-face interactions. But with 1 million users already in China, LinkedIn has a "toehold" in the country that it can leverage, he said. "But if it waits too long, it will miss its opportunity," Natkin added.

A LinkedIn rival, French company Viadeo, is already tapping the Chinese market through local partner. Tianji.com opened in 2005, and claims to be the largest professional social networking site in China with 6 million users.

But it's only recently that Chinese people have started to view the web as a business networking tool, according to the company's CEO, Derek Ling. "It's taken professionals a while to get used to the idea of using this service. But now we are actually seeing a turning point in China," he said.

That turning point is the result of other Chinese Facebook-like sites gaining popularity in the country, giving users exposure to how social networking services can work. These sites, however, mainly became popular from the games and entertainment offered, Ling said.

"But then after gaming what happens?" he asked. "I think people are finally looking for real value in social networks. This is where professional networks can really pick up in China."

Tianji.com aims to serve that "real value" by providing ways for users to advance their careers and learn about business opportunities. But to do so, the company has had to confront certain cultural differences. For instance, Chinese users are turned off when offered a business proposition, without first getting to know the other party, Ling said. To accommodate this, the site has introduced features to promote interaction, like the ability to create groups, or to "poke" other members to get their attention.

"In the last couple of years, people were also uncomfortable with putting their real identity online. That's probably been one of our biggest hurdles," Ling said. But this has begun to change as more Chinese users have grown familiar with social networking sites and how they can be used.

"I think in the next one or two years, it will be very exciting for us," he said. "The whole social networking stage in China has been popularized."